Resolute Energy Corporation (NYSE: REN) and Penn West Petroleum (NYSE:PWE) are both small-cap oils/energy companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, institutional ownership, risk, dividends, analyst recommendations and profitabiliy.

Valuation & Earnings

This table compares Resolute Energy Corporation and Penn West Petroleum’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Resolute Energy Corporation $210.70 million 3.05 $36.32 million ($4.90) -5.95
Penn West Petroleum $389.75 million 1.63 $161.20 million ($0.85) -1.48

Penn West Petroleum has higher revenue and earnings than Resolute Energy Corporation. Resolute Energy Corporation is trading at a lower price-to-earnings ratio than Penn West Petroleum, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

86.1% of Resolute Energy Corporation shares are owned by institutional investors. Comparatively, 19.7% of Penn West Petroleum shares are owned by institutional investors. 7.7% of Resolute Energy Corporation shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Risk and Volatility

Resolute Energy Corporation has a beta of 3.32, indicating that its share price is 232% more volatile than the S&P 500. Comparatively, Penn West Petroleum has a beta of 4.62, indicating that its share price is 362% more volatile than the S&P 500.

Profitability

This table compares Resolute Energy Corporation and Penn West Petroleum’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Resolute Energy Corporation -35.56% N/A -18.45%
Penn West Petroleum -95.25% -22.87% -14.47%

Analyst Ratings

This is a breakdown of current recommendations for Resolute Energy Corporation and Penn West Petroleum, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Resolute Energy Corporation 0 2 10 0 2.83
Penn West Petroleum 0 7 1 0 2.13

Resolute Energy Corporation presently has a consensus target price of $42.56, indicating a potential upside of 46.04%. Penn West Petroleum has a consensus target price of $2.37, indicating a potential upside of 88.10%. Given Penn West Petroleum’s higher probable upside, analysts plainly believe Penn West Petroleum is more favorable than Resolute Energy Corporation.

Summary

Resolute Energy Corporation beats Penn West Petroleum on 7 of the 13 factors compared between the two stocks.

Resolute Energy Corporation Company Profile

Resolute Energy Corporation is an independent oil and gas company. The Company is engaged in the exploitation, development, exploration for and acquisition of oil and gas properties. The Company’s assets are located primarily in the Delaware Basin in west Texas (the Permian Properties or Permian Basin Properties) and Aneth Field located in the Paradox Basin in southeast Utah (the Aneth Field Properties or Aneth Field). The Company has an interest in gas gathering and compression facilities located within and adjacent to its Aneth Field Properties. The Aneth field is an oil field located in southeast Utah. The Aneth field is connected by pipeline to a refinery located near Gallup, New Mexico. As of December 31, 2016, the Company had interests in approximately 23,900 gross (20,000 net) acres in the Permian Basin of Texas and southeast New Mexico.

Penn West Petroleum Company Profile

Penn West Petroleum Ltd. (Penn West) is a conventional oil and natural gas producer in Canada. The Company operates a portfolio of opportunities with an oil position in the Cardium, Viking and Peace River areas of Alberta. Penn West is a development and production company. During the fiscal year ended December 31, 2016, Penn West had produced 20 million barrels of oil equivalent (MMboe), consisting of eight million barrels (MMbbl) of light and medium crude oil, three MMbbl of heavy crude oil, 44 billion cubic feet (Bcf) of conventional natural gas and one MMbbl of natural gas liquids. As of December 31, 2016, its production and reserves were attributed to approximately 92 producing properties. Penn West’s operations are focused on light-oil development. Its principal oil and natural gas properties and related operations, and activities include Cardium Resource Play, Peace River Resource Play and Viking Resource Play.

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